Rudolph Technologies (RTEC)

Company

"Rudolph Technologies, Inc. is a leader in the design, development, manufacture and support of high-performance process control metrology and macro defect inspection equipment used by semiconductor device manufacturers around the world." (company website)

rtec(4-1)
RTEC 4-month chart
rtec(4-1)_1yr
RTEC 1-year chart

Sell Short

A few days ago I covered my previous short position in RTEC when I feared it was going to bounce off the chart trend line and possibly reverse the down trend. Yesterday it jumped on more than double normal volume RTEC peaked in August but has been trending down since then. A modest earnings surprise in November was enough to arrest the freefall from the October peak, but not to change the trend. Right now it is in a squeeze play between the falling 50-day moving average and the rising 200-day.

  • Percentage price oscillator (PPO) — above the signal line but showing signs of converging back toward it
  • Volume — volume peaks since earnings are decreasing

Based on technical analysis, MarketEdge calls RTEC a "short candidate" in a "weak downward trend."

Buy to cover

gain Bottom line
-5%

What was I thinking? Obviously I wasn't. That big jump on volume should have been a clue, but when I shorted RTEC the price was falling from the previous close and I thought that was just an aberration. Wrong! After a couple hours of trading today, I could see that I had put my money on a loser, so I bailed to limit the loss.